BCG all set to revive BSNL

Various Media sources have reported that India”s second largest telecom operator by overall subscriber base, state-owned BSNL, which has seen massive erosion in net profits and is surviving only on interests from its cash reserves, is putting up a four-pronged revival plan based on the recommendations of Boston Consulting Group (BCG).

According to Financial Express, as per the strategy, the company will focus on four key operations–consumer mobility, broadband, enterprise business and new business which includes infrastructure sharing.

According to BCG, BSNL’s enterprise business is a weak link in its entire operational chain. For instance, the BCG report has said, “There are significant gaps in the company’s ‘go to market’ approach. There is almost no customer segmentation and special service level agreement over large enterprises.” A company executive said that in order to revive its enterprise business, the company would now address the issue at three levels–product sales, service delivery and service assurance. Customers would be divided into platinum, gold and silver accounts with special service-level agreements within each segment.

Deccan Herald reported that The telecom giant is losing money, market share and its brand pull. It is a victim of official bungling & political wrangling. Urgent & sweeping changes are needed to restore its lost glory

Further, it is reported that one of the major reasons for BSNL’s poor profit in 2008-09 was a sharp increase meeting enhanced salary commitments due to implementation of the Sixth Pay Commission. Yet another reason was high depreciation charges of Rs 8,500 crore in 2008-09 and Rs 9,696 crore in 2007-08. BSNL has claimed that its earnings before interest, depreciation, taxes and amortisation (EBIDTA), was positive at Rs 7,000 crore.
Intense competition following the opening up of the telecom sector to mobile operators, is another reason that has caused BSNL’s downfall.

It has also been reported that there is a proposal to merge BSNL with Mahanagar Telephone Nigam Ltd (MTNL) which operates in Delhi and Mumbai.

Following News Media Articles were referred for this Story

BCG Scripts BSNL revival

BSNL calling a wrong number

Raja to review BSNL’s profit plunge, IPO plans

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